Entrepreneur’s StartUps – Trendspotter

Uncover trends before everyone else does–and build a business with staying power.

It’s no stretch to say that Allyson Ames spotted a trend well before its time, simply by virtue of the fact that she enjoyed baking at an early age. “Allyson decided at 5 years old that she loved to bake,” says her mother, Sondra, who opened Wonderland Bakery with her daughter in Newport Beach, California, in 2005.

Wonderland sells fairytale-themed treats and merchandise with higher price points aimed at the “treat elite”–customers seeking more than your average supermarket cookie. Other gourmet bakeries are making a name for themselves, too, including Cupcake Royale in Seattle and Magnolia Bakery in New York City.

Wonderland’s mother-daughter team has already passed the $1 million mark after only a year in business. They opened a second location last year in a prestigious shopping mall in nearby Costa Mesa. According to the Ameses, this ability to successfully spot a trend and act on it stems from one thing: “We were passionate and followed a dream,” says Sondra, who’s in her early 50s.

To spot the right trend and be able to profit from it, start by asking yourself what you care about most, then determine if there are others who desire a certain product or service related to that passion. “Intuition can work very well [in trend spotting], especially if you can convince others of your idea,” says Henrik Vejlgaard, trend expert and author of Anatomy of a Trend.

It was a no-brainer for Jason Brown, who developed the idea for Organic To Go after noticing the lack of quick, organic foods available to office workers and students. “I eat organic and natural food [at] home,” says Brown, 50. Unable to find the same type of food at lunchtime, Brown realized there was a trend toward “organic convenience” in the making.

After researching his idea, Brown launched Seattle-based Organic To Go, which now has 25 certified organic cafes throughout the Seattle and Southern California areas offering entrees, bag lunches, desserts and more. Each cafe is in a location that’s convenient for office workers and students: They’re in multitenant office buildings, on corporate and college campuses, and at Los Angeles International Airport. The company–which earned 2007 revenue of about $25 million–also offers corporate catering and delivery. Brown’s growth strategy includes acquiring small, independently owned cafes and turning them into Organic To Go locations–and typically bringing their staff members into his organization as well.

But remember, identifying your passion is only the first step. There are a number of ways to research your trend once you have an inkling that it might catch on with the masses.

People

“Watch people to understand trends,” says Vejlgaard–focus your observations on young people, designers, artists, gay men, celebrities and the wealthy. “If one or more of these groups is involved, it’s a sign of a major trend.”

Ideally, you will know someone in one of these groups (or know someone who knows someone) and be able to talk to them personally. These firsthand observations will tell you what these groups are wearing, buying, eating and talking about.

As a five-time entrepreneur, Brown had access to leaders in the natural products industry–presumably, people who know the eating habits of the groups that Vejlgaard mentions. When Brown asked these leaders what they thought of his idea for an organic eatery, he recalls: “Every one of them said, ‘What a great idea.'”

Taking his research a step further, Brown followed another one of Vejlgaard’s tips: firsthand observation. “I flew all around the U.S. repeatedly,” he says. “I looked at potential competition and ate in their delis. I spent time in their locations, observing.”

Brown also made some observations in Europe–something Vejlgaard also advises. “In some cases, trends come from Europe,” Vejlgaard says, “and if you are interested in trends on food, interior design, travel and other lifestyle areas, it can be worthwhile to read European magazines to stay ahead.” For inspiration from all over the world, he recommends the International Herald Tribune, which is also published in the U.S. and online.

In fact, keeping up with print and online media will show you a lot about current tastes and can help you predict how those tastes will evolve. The key is to spot the trend before it has become mainstream, so look to sources that are likely to track trends early on. Vejlgaard recommends Elle, Los Angeles magazine, New York magazine, The New York Times, Out magazine and Vanity Fair. These publications are all online, too. “Look at what is mainstream, and then think about the opposite,” advises Vejlgaard. Trends are largely a reaction to the dominating tastes; e.g., if cars are square, then sooner or later people are going to want them to be round, explains Vejlgaard.

Familiarize yourself with trends; religiously peruse newspapers, magazines, blogs, social networking sites and the like. Become good at reading people and their tastes. Then you’ll easily be able to spot where their tastes are headed.

Places

If possible, observe trendsetting groups in cities where trends are likely to emerge–either in person or with the publications and other resources mentioned above. If a trend gains a following in Los Angeles, New York City or San Francisco, that’s a good sign. “It’s not that the trend has to begin [in those cities]; it can start anywhere,” says Vejlgaard. “But the trend is more likely to spread out to other areas from these cities.”

For the Ameses, their Southern California location has afforded them celebrity clients like Kobe Bryant. And as they grew their Newport Beach location, they recognized a demand for not just the treats themselves, but also the Wonderland experience. “[We saw] people’s reactions,” says Allyson, 22, noting the wide-eyed tots who enter the Newport Beach bakery and revel in the whimsical décor and the sweet smells of baked goods. “We want people to take home a piece of Wonderland.”

As such, the partners have expanded on the trend even further by creating an entire line of Wonderland merchandise, including tea sets, lunchboxes, a storybook and a talking “Allyson Wonderland Bear” that they developed with toy company Gund.

The Ameses’ expansion story is a good reminder that even when you’ve identified and acted on a trend, you mustn’t rest on your laurels. As trends evolve, so must you. In his book, Vejlgaard notes: “You have to develop new products regularly to maintain your position in the market.”

Things

What if you don’t have much of an inkling about a trend and you can’t think of something in your own life that could be trend-worthy? Or what if you don’t have access to trendsetters who can clue you in?

Don’t be afraid to seek advice from experts in the industry you’re considering entering. While Brown knew some key industry players, he says anyone can obtain the information they need if they just pick up the phone and call. “Most people are willing to talk with others about good ideas,” he says.

If startup funds permit, you can use the services of a market research company. “It’s a challenge as a startup to spend money,” says Gary Rudman, president of GTR Consulting, a youth-focused marketing agency. “But it helps to get a deeper understanding of what’s going on in the market.”

In particular, if you plan to seek VC or other outside funding, as Brown did, you’ll need to be able to provide solid evidence of a trend. “The way the VC market is, [investors] are approaching things very cautiously,” says Rudman. “They want to know that you know what you’re talking about.”

Whether you research a trend yourself or get professional help, you can gain a firm grasp on a trend in advance if you personally believe in the trend and commit to doing your due diligence. Take the steps we’ve outlined to heart, and before long, you will know what you’re talking about–and you’ll be ready to take advantage of the next big thing.

Karen E. Spaeder is a freelance writer and the founder of Rain Frog Apparel, an eco-friendly clothier based in Southern California.

Track your trend’s potential with these questions.

Henrik Vejlgaard, author of Anatomy of a Trend, offers the following questions as a means of determining whether something is a trend:

Was the trend first adopted by one or more of these groups: young people, designers, artists, gay men, performing artists/celebrities or wealthy people?

Are there many people among these groups who have adopted the trend?

Did the trend gain a following in Los Angeles, New York City or San Francisco?

Is the trend observable in two or all three of these cities?

Are media that have typical trendsetters as a target audience writing about the trend?

Says Vejlgaard, “If you can answer yes to these questions, this is a trend that will go mainstream.”